The grey wizard spell 'blade in the dark' says you need a free hand or a sword in one hand to cast it. So if your a typical wizard with a staff could you still cast it by holding the normally two handed staff in one hand? How would this affect the staff's defensive ability?

This is a lot like the reloading while holding a gun and sword at the same time question.

I would say [as a GM] that you can hold it in one hand, but it would lose its defensive ability while doing this.